By Ed Arcinue
Starting a business is understandably daunting. The lack of stability that comes with venturing out independently can hinder entrepreneurs from pursuing their business idea. And even with a great idea and a lot of enthusiasm, many just don’t know where to begin.
Overcoming hesitations and following your dream takes preparation. Here are some steps to get you going.
Understand the Market Landscape and Your Competitors
Doing market research is critical, whether you’re creating a product, opening a sandwich shop, or starting a law firm. Knowing the players in your space will help you position yourself in the marketplace and flesh out what sets you apart. Research doesn’t need to be complicated or expensive, and you don’t necessarily need to hire a professional. Start by simply looking at what your competitors offer, their strengths and weaknesses, and any clear differentiators. Make sure you revisit your analysis periodically and monitor any changes.
Create a Specific Business Plan That Caters to Your Company
Research has shown that drafting a business plan significantly increases a startup’s chance for success. It will force you to think specifically and strategically about your business concept, your goals, financial projections, and your audience. You don’t need to conform to a format, but make sure your plan includes, and that you’ve thought through, all the necessary elements. You can find free business plan templates online to help you get started.
Seek Legal Counsel
You don’t know what you don’t know. Speaking to a lawyer or a trusted advisor can help you avoid startup mistakes, make informed decisions, and have peace of mind as you launch your business. Whether you seek advice from your lawyer or take advantage of prepaid services like legal plans, make sure you have a professional that can help you with things like reviewing contracts, selecting the best business entity for your needs, and just protecting your interests.
With a solid business plan you’ll know how much funding you need to get started. There are many ways to get that funding – family, friends, savings, loans, credit, cards, or even crowdfunding. Determine the source or sources that will work best for your circumstances and perfect your elevator pitch! It’s a good idea to have a tax or legal advisor review options with you before you finalize funding.
Register Your Business
You have strong concept, a catchy name, and initial funding. What about the legal formalities? Forming a business entity can help you protect your personal assets and save on taxes. Mundane legal tasks can be a hassle at best and confusing at worst, but they are essential to building a solid foundation for your new business. Regardless of the type of entity – LLC, incorporation, DBA, or other – it’s necessary to register your entity and ensure you comply with federal, state, and local laws while you focus on running your business.
Starting and running a business is not for the faint of heart, but with the right preparation and assistance, you can focus on your idea and enjoy the exciting time.
Ed Arcinue is the Chief Customer Officer for LegalZoom.